Boeing workers vote to accept agreement and end strike

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Striking workers at embattled airplane maker Boeing voted Monday to accept the company’s latest proposal, ending the costliest strike in the United States in more than 25 years.

The International Association of Machinists (IAM) said rank-and-file members voted 59% to approve the deal. IAM members voted almost unanimously against Boeing’s first proposal on the eve of the strike, and then 64% voted against the second proposal less than two weeks ago, extending the strike.

“I am proud of our participants. This is a victory,” said John Holden, president of Boeing’s largest IAM local and the union’s chief negotiator. “They’ve accomplished a lot and we’re ready to move forward.”

Asked what prompted the positive vote this time after two previous refusals, Holden told reporters: “Members are ready, ready to come back. I look forward to getting them back to work.”

Boeing said it was pleased with the result.

“While the last few months have been difficult for all of us, we are all part of the same team,” CEO Kelly Ortberg said in a statement. “We will only move forward by listening and working together. There is still a lot of work ahead to return to the excellence that has made Boeing an iconic company.”

33,000 union members who were has been on strike since September 13will begin returning to work on Wednesday.

The deal calls for an immediate 13% rate increase and 9% increases in each of the next two years, followed by another 7% in the fourth and final year of the contract. Collectively, members will receive pay increases exceeding 43%.

Workers also receive a $12,000 ratification bonus, a portion of which they can contribute to 401(k) retirement accounts. But the deal did not restore the traditional pension plan they lost in 2014 due to a previous labor agreement.

Continued worker dissatisfaction with the loss of this pension plan was seen as a major factor in the abandonment of the Boeing program (bachelor) the previous two sentences and caused uncertainty about the outcome of Monday’s vote.

Holden acknowledged that pensions were likely to be a major issue for many of the 41% who voted against the deal.

“Fifty-nine percent is a lot, but there are definitely some who are not happy with the agreement,” he said. “Many members fought for the return of pensions. This is a righteous fight.”

Companies, both union and non-union, have generally moved away from traditional pension plans known as defined benefit plans in recent decades. Such plans typically pay retirees a certain amount each month, regardless of how long they live or how well the pension fund’s assets perform.

Such plans create risks for companies. For this reason, defined benefit plans are now available to only about 8% of American workers in the private sector, according to the Employee Benefit Research Institute. For comparison: in 1980 this figure was 39%.

Boeing employees have what are known as defined contribution plans, such as 401(k) plans, in which the company’s obligation ends once contributions are made to the individual employee’s account. Boeing agreed to increase contributions to those accounts but refused to return to a defined benefit plan, as the union and many of its members had demanded.

“Our members deserve pensions just as every worker deserves a secure and fair future retirement,” Holden said Monday after the vote. “They weren’t wrong to feel what they felt. I agree with them. We simply could not receive a pension from this company. We will continue to work on this issue.”

The trade union leadership had urged members to accept last sentence, although it was not significantly different from the one they rejected October 23. The union urged members to “capture these gains and confidently declare victory” and warned members that another refusal could “risk a regressive or lesser proposal in the future.”

Strikers lost more than $600 million in combined wages, but Boeing’s losses were significantly higher, according to estimates from Anderson Economic Group, a Michigan-based research firm, which estimates Boeing’s losses through the end of last week at $6.5 billion. Overall, the damage to the US economy exceeded $11.5 billion.

Those losses exceed the nearly $40 billion in underlying operating losses Boeing reported after two fatal crashes led to a 20-month grounding of its best-selling 737 Max jet in 2019 and 2020. The company has already warned. that its losses will continue until at least the end of 2025, no matter how quickly the strike ends.

But despite deep financial problems, Boeing had no choice but to settle the strike and return workers to work. The strike has deprived the company of its main source of income, since it makes most of its money from selling commercial aircraft as they are delivered to airlines. Deliveries of all 737 Max planes, as well as freighter models, have been halted due to the strike.

The wages Boeing pays its workers account for far less than 10% of the total cost of producing a plane, with most of the costs going into raw materials and purchasing from suppliers that make everything from avionics to the fuselage of the planes themselves.

Despite its problems, Boeing is still a major contributor to the US economy as the largest American exporter.

The strike has caused problems and layoffs at many of Boeing’s 10,000 suppliers, which are located in all 50 states. Boeing estimates its annual contribution to the U.S. economy at $79 billion, directly and indirectly supporting 1.6 million jobs. The company has 150,000 American employees, including strikers.

Latest news from the Ministry of Labor monthly employment report showed that 44,000 jobs were affected in October, counting not only the 33,000 on strike but also workers at Boeing and its suppliers who are not on strike but have been temporarily laid off as the strike completely halts commercial aircraft production at the airline giant.

Airlines also had short-term problems. Although they were able to continue using Boeing aircraft already in their fleet, promised deliveries of new aircraft were stopped. And that delay comes on top of ongoing delays caused by questions about the quality and safety of Boeing’s planes.

These problems were exacerbated by a January incident in which the door plug came off of an Alaska Airlines plane shortly after takeoff, leaving a gaping hole in its fuselage. Investigators determined that Boeing delivered the plane without four bolts it is necessary that the door plug remains in place.

Ending the strike is important for Boeing Ortbergwho started work just five weeks before the strike began. He said he wants to “reset” the company’s relationship with the union.

This story has been updated with additional reporting and context.